Hong Kong– Research released today by Knight Frank confirms that despite Covid-19 inspired lockdowns around the world, 153 residential real estate transactions above US$10m have taken place globally since March 2020, with a total value of US$3.2bn.

However, despite the positivity that the global super-prime market didn’t buckle during lockdown, transaction levels to the end of H1 2020 are far below the levels seen in H1 2019 with 281 super-prime (US$10m+) transactions taking place January to June 2020 compared to 594 over the same period 2019.

The research looks at how 12 key super-prime markets around the world performed in H1 2020 compared to H1 2019 and delves into the number of transactions completed since March 2020 when Covid-19 was officially labelled a pandemic, lockdowns were enforced around the world and international travel ceased.

Table 1: Total Transaction Volumes

Maggie Lee,

Maggie Lee, Senior Director, Head of Residential Agency at Knight Frank Hong Kong said, “Despite COVID-19, Hong Kong’s luxury home market has remained resilient as we still saw a good number of transactions being closed in the first half of 2020. Against the backdrop of quantitative easing in different parts of the world, luxury residential assets are good store of value for investors. Coupled with the scarcity in nature for luxury homes in Hong Kong, the buyers are still optimistic these assets would bring capital appreciation over a longer-term period.“

“The volatility of equity markets is prompting some ultra-high-net-worth-individuals to rebalance their investment portfolios in Asia-Pacific, giving greater weight to property assets. Prime residential markets stand to benefit from this shift, remaining relatively more resilient compared to other asset classes in the second half of this year,” said Victoria Garrett, Head of Residential, Asia Pacific.

“Hong Kong, Singapore and Sydney remain safe havens for the region’s wealthiest, demonstrated by the resilient demand in the prime and ultra-prime segments”, added Garrett. “In uncertain times, the promise of long-term stability will be particularly attractive to investors. For Asia’s wealthiest, acquiring prime assets is a form of wealth preservation.”   

Flora Harley, Global Residential Research at Knight Frank said, “Sydney was the standout market with 15 super-prime sales in the first half of 2020 compared to 13 in the first half of 2019, however looking at the period between March and June period there were only six compared to 12 in the same period last year.”

Total Sales Volume

Despite the falling number of transactions, deal values were generally higher. Overall, the global average transaction value increased by 15% for the March to June period, at US$20.7m compared to US$18m for the same period in 2019.

London saw the largest increase and takes the top spot with an average transaction value of US$38m, compared to US$16.9m in 2019.

Table 2 – Total Sales Volume

However, Hong Kong ranks highest for the number of transactions and total sales volume with 60 having taken place in 2020 so far worth a combined US$1.2bn (Table 1). There have been 41 since March and, whilst this is less than half of the 155 in the first half of 2019, it is only marginally down from the 74 in the second half of 2019 when the city grappled with social unrest.

New York has the third highest number of super-prime sales this year with 41, behind 52 in Los Angeles, and almost half of these, 19, having taken place since March. With the city being particularly hard hit by Covid-19, accounting for approximately one in six of all US cases in April, this demonstrates resilience and that the fundamentals remain.

Ultra-Prime Market (US$25m)

The research also takes a look at the ultra-prime market (above US$25m) in these 12 areas. It highlights that eight of these markets saw one or more transactions in the ultra-prime market over the March to June 2020 period - two saw more sales than the same period last year and two held steady – a total of US$1.3bn was transacted.

Table 3 – Total Sales Transactions

Hong Kong has once again seen the highest number of ultra-prime sales in this time period with eight, down from 20 for the same period in 2019.

 The momentum in this segment could continue as ultra-high-net-worth individuals look for more spacious options post-lockdown. This is already evident in, for example, LA where half of this year’s ultra-prime sales have taken place since the beginning of April.

*Data correct as at 22 June and corresponds to publicly available sales and therefore may not capture all sales in the market. Exchange rates as at 22 June 2020.